Two things have happened. The first is that the house I’m pursuing has been “delisted”. I don’t know exactly what that means. The last time it went off market, one website said it was in “pending” status, and the website I see it on now says “delisted”. But that website also shows it went “delisted” the last time too.
What does that mean? My first reaction was that I didn’t win the bid. Later, after thinking about it, I haven’t gotten any information from my agent, so maybe the seller has collected all the bids they want and has closed the bidding process while they evaluate them. That makes sense, right? So I’m not exactly out of the running just yet, am I?
Or am I? My options for funding are running extremely thin. I got an email back from the credit union. They will not budge over $20k, not as a personal loan and not as the clever credit card option. So, that leaves me short by $18k (ideally) or $10k (aggressively). What’s left to do? I can tell you unequivocally that I am not going to do some insane thing like take out a cash advance on a credit card, even though that could be accomplished.
Just for illustrative purposes to show the possibility: I jumped on the Capital One website, since I have a high-limit card with them. I can do a cash advance of $10k with them. The APR for cash advances is… WHHHHAAAT! 24.9%!!!! Ok. Ok. That would be fine. Let’s see. A $10k balance would be a little over $200/mo just in interest. Assuming it’s still “like a credit card” like I calculated with my credit union, the payments still would be achievable in the short term.
But, we have to kill that 25% APR. So, we initiate a balance transfer to someone who is running a 0% promo APR for balance transfers. You want to know why banks do this, even though it seems they won’t make any money on it? There’s a balance transfer fee, which is either fixed or a percentage of what you are transferring. They get money. Ok, off to NerdWallet so we can check Balance Transfer cards.
Well, surprise, surprise. Chase has a card that has 0% APR for 15 months and 0% transfer fee if done within 60 days. But just to point out how normal luck would play out, the next two best cards have a 3% transfer fee. So that’s $300, right there. But you get 0% for 18 months. Not all bad news.
So let’s add this up. My first month at Capital One would be $200 in interest. My balance transfer would be another $300, then I would probably have some residual interest from Capital One because of the average daily balance calculation, so let’s guess another $100. A total of $600 in interest and fees to get 18 months of financing, which I would eventually convert to a home equity loan anyway. Not to mention the previously-discussed major hit to my credit score based on utilization, which would affect my home equity rate. It’s doable, but far from ideal. There’s a reason the boring and simple solutions are so much better than clever solutions. You know the old adage, banks only lend to people who don’t need the money.
Back to reality. What’s my last-ditch option? The Internet. Lending Club offers up to $35k personal loans at 7-9% APR (for 5 years) with a 1-4% fee. The APR is pretty much in line with other personal loans, but that origination fee… man. Let’s see, working on a $30k loan, that’s a fee between $300 and $1,200. Worse, the fee is deducted from the amount you borrow, so a $30k loan may only net me $28,800. Maybe this isn’t such a viable solution. Any other options? Yeah, a 401(k) loan. But I can’t even stomach that thought right now because of reasons.
Right now, I’m not even sure what’s going to happen. All I know is that I haven’t paid any earnest money yet, so my only loss at this time is a few credit inquiries on my credit report and a whole lot of time. I’m still safe to bail if I feel this is just too risky.